Be Prepared for an Onslaught of Coronavirus-Related Lawsuits
The coronavirus pandemic has changed the way that companies must do business to survive. This change occurred over an extremely short period of time, with little notice, and while companies had limited resources. This unusual situation has caused companies to make decisions on an expedited basis with limited opportunity for careful contemplation and forced them to set priorities quickly. As a result, some lawsuit advocates and plaintiffs are using this unfortunate dilemma to promote or bring coronavirus-related lawsuits.
The news and internet are full of stories about coronavirus lawsuits being considered, planned, promoted, and/or filed. Among those claims being filed or considered include those involving employment issues, passing off fake goods and trademark violations, travel/sports/entertainment refunds, failed service contracts, inadequate or improper provision of PPE, inadequate protection for employees and inmates, robocalls or junk facsimile under TCPA, tuition recovery claims, declaratory judgment to establish business interruption loss insurance coverage, the use of force majeure clauses in contracts, price gouging, personal injury caused by negligence, medical malpractice, consumer fraud or misrepresentation, lending and collection practices, securities fraud class actions, pandemic avoidance, and Constitution-based claims, among others. The categories are likely to grow as counsel refine and discover new types of claims. Many of these cases might be attempted as class actions or consolidated MDL matters.
Defense and Prevention
Companies must prepare in advance to prevent and defend against these challenges. First, companies need to carefully follow frequently changing local, state, and federal regulations relevant to their business to keep in compliance. Many of these lawsuits depend on the breach of some type of duty, sometimes established by the moving target of local, state, and federal regulations or guidelines. Therefore, it is important to have someone tracking these moving standards and timely implementing company policy as a result. For example, some states have consumer laws that implement special rules (like anti-price gouging laws) during times of emergency. See e.g. N.J.S.A. 56:8-109 and New Jersey Executive Order 103, dated March 9, 2020. In addition, employment law has moved at a lightning pace. It is critical to keep on top of moving issues like these to avoid becoming a litigation target.
Although lawsuit advocates will file and pursue costly claims, there is some good news for potential defendants. In many cases, coronavirus exposure cases might be hard to prove because the source of infection can be difficult to determine with any reasonable level of competence. Moreover, many of the claims will likely have significant individual issues that make them poor candidates for class action or even possible consolidation. Lastly, although carriers have often denied business loss coverage claims due to the coronavirus, states and courts seem to be taking corrective action friendly to the provision of coverage. So, if you think that you don’t have coverage, think again and consult an attorney early before giving up. And, in the event that a claim is threatened or filed, give your carrier and lawyer immediate notice. Many times, early intervention by customer service, a carrier, or counsel can diffuse a misunderstanding or dispute before it escalates into a long, costly ordeal.
Being proactive to prevent and prepare for these claims should be an important part of your business plan, even during these challenging times.